U.S. oil companies seem to be losing interest in Iraq, which a decade ago was seen as the big prize in the global energy business with the world's fifth largest oil reserves and low production costs.

This is largely due to growing disenchantment with the Shiite-dominated Baghdad government of Prime Minister Nouri al-Maliki, its bloated, corrupt bureaucracy and America's own energy boom that lessens its dependence on Middle Eastern oil.

The disenchantment coincides with Washington's dismay at Iraq's unrelenting political and sectarian turmoil and Iran's growing influence, particularly since the U.S. withdrawal in December 2011.

In the meantime, China's moving in to lay claim to much of Iraq's known oil reserves of 143.1 billion barrels, which it needs to feed a burgeoning economy.

"The predicted bonanza for Western oil companies in post-war Iraq has failed to materialize," the Financial Times observed.

"Political instability, poor contractual terms and infrastructure bottlenecks have sharply reduced the country's appeal to Big Oil ...

"The business climate has soured. Political volatility, fears about security and problems with infrastructure, including a lack of pipelines, pumping stations and oil storage facilities have slowed the oil sector's recovery," the business daily noted.

When George W. Bush decided to invade Iraq, citing Saddam Hussein's supposed weapons of mass destruction and equally non-existent alliance with Osama bin Laden, the buzz was that it was all about taking over Iraq's vast oil wealth.

If that was the case, it didn't pan out that way.

"American companies are now almost absent from the Iraqi upstream scene," observed Robin Mills of Manaar Energy Consulting in Dubai.

Indeed, the few U.S. companies that did secure 20-year production contracts with Baghdad, led by Exxon Mobil, became so reluctant to invest they defected to Iraq's semi-autonomous Kurdish zone where their profit margin is far greater and conditions more stable.

Exxon led the way in October 2011, putting its stake in the $50 billion West Qurna 1 mega-field in southern Iraq up for sale, and was followed by Chevron, plus Total of France and Gazprom Neft of Russia.

This has intensified tension between Maliki's problem-plagued government and the Kurdistan Regional Government, which sits on 45 billion barrels of oil. It's also heightened Kurdish aspirations for self-rule.

The U.S administration doesn't seem to have been unduly concerned about the failure of Big Oil, and particularly U.S. companies, to secure access to Iraqi's oil wealth, triggering speculation it backs the move toward Kurdistan as part of some strategy or other.

But the Chinese, scouring the Middle East, Africa and Latin America for energy and mineral resources, have moved in to fill the vacuum.

In October, the International Energy Agency, the West's energy watchdog, reported that by 2020, 80 percent of Iraq's oil will be going to Asia, including 1.5 million barrels per day to China, rising to nearly 2 million bpd by 2035. That will be about one-quarter of Iraq's expected output.

"There's a new trade axis being formed between Baghdad and Beijing ... the B&B link," observed the agency's chief economist, Fatih Birol.

"In effect, China will be replicating in Iraq what it's done in several African nations," most prominently in Angola, the Democratic Republic of Congo and South Sudan.

"The 'B&B' oil link would not only be the key for the oil market but could also force a bigger political and military involvement of China in Iraq and the broader Middle East."

Already, PetroChina, China National Petroleum Corp. and China National Offshore Oil Corp. are either partners or operators in several major Iraqi oil fields.

Analysts say state-owned outfits like these are less likely than profit-driven Western companies to be put off by the low fees and low returns that are standard fare in Iraqi production contracts.

"For them, the key is access to Iraq's hydrocarbon resources and the off-take deals that allow them to export crude," the Financial Times observed.

"The Chinese have a higher tolerance for risk," said Gal Luft of the Institute for the Analysis of Global Security in Washington.